News

Technological change and the future of work

Technology doesn’t just replace jobs, it also creates them. Technology has many effects on the labour market, some of which are positive for workers, the quality of work, and jobs. Predictions that technology will inevitably replace work are simplistic and out of step with historical experience.

There isn’t much sign of looming technological disruption. Faster technological progress would be evident in labour the market and economic measures, such as productivity growth, occupational churn, and business start-up rates. But across the developed world, all of these measures are slowing or declining.

New Zealand needs more technology, not less. Technological progress and adoption drives productivity and income growth. If we want higher incomes for ourselves and our children, New Zealand firms need to take up technology at a faster rate than has been the case in recent years.

New Zealand is well-placed for faster technology adoption in some respects, but not in others. By international standards, adult New Zealanders are skilled and train at high levels. Our policy settings generally encourage openness to ideas, goods, services, investment and skills. And our labour market has historically done a good job of creating lots of jobs. On the other hand, core skill levels in our schools are dropping; high house prices make it hard for some workers to move to better jobs, and New Zealand’s business environment lacks dynamism.